MARKETING STRATEGIES AND POLICIES

OF HINDUSTAN UNILEVER LIMITED

A major project report

Submitted in partial fulfillment of the requirements for BBA(GEN)

semester VI programme of Guru Gobind Singh Indraprastha

University,Delhi

By:

Mitesh Kumar Verma

Enrl.no.:0551221705

BBA(General)

Delhi College Of Advanced Studies

B-7, Shankar Garden ,Vikaspuri

New Delhi-110018

Declaration
I here declare that the major project, entitle “marketing strategies

and policies of Hindustan Unilever Limited”, is based on my original

study and has not been submitted earlier for any degree or

diploma of an institution/university.

The work of author(s), wherever used has been acknowledged at

appropriate places.

Place: Candidate’s signature

Date: Name:

Enrol.no.:

Countersigned

Name:

Supervisor

Delhi college Of Advanced Studies

 PREFACE
Hindustan Unilever Limited (formerly Hindustan

Lever Limited) is India’s largest Fast Moving

Consumer Goods company with a sales turnover of more than

Rs.10,000 crores. At least one of its products reaches two thirds of

Indian households. It has 35 brands and employs more than 15,000

people. Its promoter company Unilever, a fortune 500

multinational, holds 51.42% equity. Unilever has presence in more

than 100 countries worldwide in FMCG sector.

Hindustan Unilever Limited (HUL), a subsidiary of Unilever, is a fast

moving consumer goods (FMCG) company based in India. The

company focuses on efficient delivery to consumers with an

improved supply chain, brand building initiatives and innovation,

which has helped the company to sustain its leadership position in

the overall FMCG category in India.

This project is a sincere effort to look for the market potential in

FMCG industry. A descriptive research procedure had been applied

to come to the conclusions of the project. A detailed questionnaire

had been prepared and the responses of the concerned people had

been collected for the analysis.

ACKNOWLEDGEMENT
I am grateful to many people who have contribution to this project.

In particular I would like to thank my faculty, MS.MEENU

ARORA, who have helped me through this project in their own

special & affordable way.

My project has been a successful task because of cheerful devotion

of always lend the support, I needed of. I have been getting all

the guidance, Dr. NARENDRA MOHAN, the director of our

college and my faculty members who possibly could get through

out the making of this project from them.They always been

ready & also have to clarify all my queries from time to time.

Last but not least I would also like to thank the library members

and computer laboratory members who also have been supportive

during the making of this project by providing adequate books as &

when required for.

Finally I extend my sincere thanks to all those who have given me

encouragement throughout, without whose generosity this project

would have been difficult for me to complete.

 INTRODUCTION

The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity

to offer us a broader view of FMCG category. The Hindustan

Unilever Ltd (HLL) is India’s no.1 FMCG is able to share with their

market insights based upon unparalleled breath of consumer goods

experience.

Hindustan Unilever Ltd (HUL) has grown from strength to strength

with new technologies being introduced to make the HLL consumer

goods business, one of the most efficient in the world. The

company’s history dates back to 1931 when Unilever set up its first

Indian subsidiary, Hindustan Vanaspati Manufacturing Company,

followed by Lever Brothers India Limited (1933) and United Traders

Limited (1935). These three companies merged to form Hindustan

Lever Limited in November 1956. Effective July 19, 2007 the

company has changed the name to Hindustan Unilever Limited.

Hindustan Unilever Limited (HUL), a subsidiary of Unilever, is a fast

moving consumer goods (FMCG) company based in India. The

company focuses on efficient delivery to consumers with an

improved supply chain, brand building initiatives and innovation,

which has helped the company to sustain its leadership position in

the overall FMCG category in India.

Hindustan Unilever is Unilever's main operating business in India. It

is the country's biggest consumer goods company, and far and

away the leading advertiser. HUL inhabits virtually every sector of

the consumer goods market, including several not occupied by

Unilever in other markets such as preserves and bakery products,

and is also one of the country’s top five exporters. In addition to

FMCG products it is the country's biggest exporter of tea. It is

generally acknowledged to be one of India's best-run businesses,

although performance slowed dramatically between 2000 and

2004, prior to restructuring.

Unilever, which sells soap to more than 500 million Indians, may

see global revenue growth slow in 2010 as Procter & Gamble Co.

and ITC Ltd. step up marketing in Asia's third-biggest economy.

The world's second-largest consumer products maker has relied on

accelerating shipments of Surf Excel detergent in India to make up

for sluggish sales in Europe.Now Cincinnati- based Procter &

Gamble is stocking Indian stores with Olay skin- care products after

nearly halving the local prices of Ariel and Tide detergents in 2004.

Asia and Africa, which make up about a third of Unilever's

worldwide sales, will see their share of the company's growth fall to

2 percent in 2010 from 3.3 percent in 2007, according to Brussels-

based brokerage Petercam SA. Revenue from the two continents

rose 11.4 percent in the first nine months of last year, helping

offset 1.9 percent growth in Europe and 4.2 percent in North and

South America.

Unilever's overall sales growth will slow to 4.9 percent in 2010 from

an estimated 5.3 percent in 2007, according to the median of five

analysts in a Bloomberg survey.

Hindustan Unilever – A 75 Year Commitment

 15,000 employees

 1,200 managers

 2,000 suppliers & associates

 75 Manufacturing Locations

 45 C&FAs, 4,000 Stockists

 Total Coverage 6.3 Mln Outlets

 Direct Coverage 1 Mln outlets

Population of INDIA: 1027 Mln

 5,545 Towns

 2.5 Mln outlets

 6,38,000 Villages

 5.0 Mln outlets

 HISTORY
OF
HINDUSTAN UNILEVER LTD
• It was in the summer of 1888 that Unilever of England first

marketed Sunlight soap in India. This was followed by brands

like Pears and Vim. Vanaspati was launched in 1918 and

Dalda came to the market in 1937.

• In 1931, Unilever set up its first Indian subsidiary, Hindustan

Vanaspati Manufacturing Company, followed by Lever

Brothers India Limited (1933) and United Traders Limited

(1935). These three companies merged to form HUL in

November 1956.

• A number of prominent companies came into the HUL fold as

result of Unilever’s international acquisitions. These included

Brooke Bond (1984), Lipton (1972) and Pond’s (1986).

• In 1993, Tata Oil Mills Company (TOMCO) merged with HUL.

Two years later, HUL and yet another Tata company, Lakme

Limited, formed a 50:50 joint venture, Lakme Lever Limited.

• Subsequently in 1998, Lakme Limited sold its brands to HUL

and divested its 50 per cent stake in the joint venture to the

FMCG giant.

• HUL formed a 50:50 joint venture with the US-based Kimberly

Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which

markets Huggies diapers and Kotex sanitary pads.

• HUL has also set up a subsidiary in Nepal, Nepal Lever Limited

(NLL), and its factory represents the largest manufacturing

investment in the Himalayan kingdom. In a historic step, HUL

picked up 74 per cent of the equity of Modern Foods from the

Indian government.

• In 2002, HUL acquired the government s remaining stake in

Modern Foods.

• FMCG major Hindustan Unilever Limited (HUL), formerly

known as Hindustan Lever Limited, employs 36,000 people,

 including over 1,350 managers. It is one of the earliest MNCs

to have entered India

ORGANIZATIONAL STRUCTURE

Managing
Direc
tor

General
Mana
ger

Vice President

Marketing Manufacturin Sales Finance Distribution

g
 PRESENT STATUS

Hindustan Unilever Limited (HUL) is India's largest Fast Moving

Consumer Goods company, touching the lives of two out of three

Indians with over 20 distinct categories in Home & Personal Care

Products and Foods & Beverages. They endow the company with a

scale of combined volumes of about 4 million tonnes and sales

of Rs.10,000crore.

HUL is also one of the country's largest exporters; it has been

recognised as a Golden Super Star Trading House by the

Government of India.

The mission that inspires HUL's over 15,000 employees, including

over 1,300 managers, is to "add vitality to life." HUL meets

everyday needs for nutrition, hygiene, and personal care with

brands that help people feel good, look good and get more out of

life. It is a mission HUL shares with its parent company, Unilever,

which holds 51.55% of the equity. The rest of the shareholding is

distributed among 380,000 individual shareholders and financial

institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair &

Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke

Bond, Kissan, Knorr-Annapurna, Kwality Wall's – are household

names across the country and span many categories - soaps,

detergents, personal products, tea, coffee, branded staples, ice

cream and culinary products. They are manufactured over 40

factories across India. The operations involve over 2,000 suppliers

and associates. HUL's distribution network, comprising about 4,000

redistribution stockiest, covering 6.3 million retail outlets reaching

the entire urban population ,and about 250 million rural consumer.

HUL has traditionally been a company, which incorporates latest

technology in all its operations. The Hindustan Unilever Research

Centre (HLRC) was set up in 1958, and now has facilities in Mumbai

and Bangalore. HLRC and the Global Technology Centres in India

have over 200 highly qualified scientists and technologists, many

with post-doctoral experience acquired in the US and Europe.

 HUL’S NEW GROWTH STRATEGY

After having fought a bitter price battle for market share with its

rivals, Hindustan Unilever Ltd (HUL), Indian subsidiary of the Anglo-

Dutch consumer goods company Unilever Plc, is now working on a

new growth strategy for its laundry business.

“Price cut or hike is not a long-term growth strategy. Pricing, in

fact, is now passe,” insists Sudhanshu Vats, category head, home

care.

“Our strategy for growth, now is focused on product innovation,

new consumer and retail trends and aggressive marketing and

promotions,” he said.

This comes even as Unilever is scouting for a potential buyer for its

laundry business in the US.

HUL says it is quite upbeat about the segment and says the

laundry segment is one of its “key growth areas.”

“We have done key innovations across the product portfolio and it

is working for us,” says Vats. “We successfully migrated from Rin

Supreme to Surf Excel and Wheel Smart Srimati—which was rolled

out in 2006—is also on the right track.”

HUL’s market share in the laundry segment grew to around 37.8%

in the quarter ended June from 35.5% in the same period last year,

according the market research firm ACNielsen. However, this time,

the increase was not at the expense of price war with its

multinational rival Procter & Gamble Co. P&G also gained 0.5

percentage points, up to a 7.6% share. Nirma Ltd, the Ahmedabad-

based manufacturer, however, saw its market share dip by 1.7%

percentage points to 13.5%.

Wheel, a value brand that, according to Vats contributes around

50% of HUL’s laundry segment revenues, increased its market

share by 2 percentage points in the same period, with a total share

of about 18%.

According to ACNielsen, the laundry industry in India was worth

Rs7,908 crore in 2006 and rose 8.4% over 2005. HUL doesn’t
report its laundry revenues separately but puts them under the

soaps and detergent category.

In 2006, HUL’s soaps and detergents segment contributed around

Rs5,596 crore to the company’s total sales of Rs12,103 crore.

“Laundry has been an attractive segment in the past and is likely

to keep growing in the near future. The recent price war between

companies led to erosion in their profitability but now, the industry

is stabilizing,” says Unmesh Sharma, an analyst at Macquarie

Securities here.

According to Vats, the laundry business is witnessing a surge in

demand from cities and HUL is focusing on Tier I and II cities to tap

that demand.
“Consumers today are buying more clothes,” says Vats. “Trends

suggest that the usage of detergents has gone up as a result. Also,

with premium quality of clothes, people want to use better and

branded products.”

Still, analysts remain cautious. “Some of HUL’s recent moves, such

as promotional campaigns and advertising, seem right,” says

Macquarie’s Sharma. “Still, it is too early to say what result their

new strategies will yield.”

PRODUCT PROFILE

HUL’s business activities are divided into four broad areas:

 Home and personal care

personal wash, fabric wash, home care, oral care, skin care,

hair care, deodorants and talcs, colour cosmetic

 Foods

tea, coffee, branded staples, culinary products, ice creams,

Modern Foods ranges

 New Ventures

Hindustan Lever Network, Ayush ayurvedic products and

services, Sangam, Pureit water purifiers.

 Exports

HPC, beverages, marine products, rice

BRANDS
HUL s brands are household names across the country. They

include:

Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond s, Sunsilk,

Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-

Annapurna and Kwality Walls.

SWOT ANALYSIS
Strength
 1. Hindustan Unilever Limited (HUL) is India's largest Fast

Moving Consumer Goods company, touching the lives of

two out of three Indians with over 20 distinct categories in

Home & Personal Care Products and Foods & Beverages..

2. Due to its long presence in India – has deep penetration

– 20 consumer product category, over 15,000 employees,

including over 1,300 managers, is to "add vitality to life."

3. The company derives 44.3% of its revenues from soaps

and detergents, 26.6% from personal care products, 10.5%

from beverages, and the rest from foods, ice creams,

exports, and other products.

4. Low cost of production due to economic of scale. That

means higher profits and / or more competitioners. Better

market penetration.

5. HUL is also one of the country's largest exporters; it has

been recognised as a Golden Super Star Trading House by

the Government of India.

Weakness

1. Continuous threat from other competitors.

Opportunities

1. Increasing per capita national income resulting in

higher disposable income.

2. Growing middle class and growing urban population.

3. Increasing gifts cultures.

4. Increasing departmental stores concept – impulse @

at cash counters.

5. Globalization.

Threats

1. HLL's tea business has declined marginally, reason is

that, cost pressure is likely due to rising crude and

freight costs.
 PEST ANALYSIS

P: since the budget range is decontrolled, no political effects are

envisaged.

E: 1) increasing per capita income resulting in higher

Disposable income

2) Growing middle class/urban population – increase in

Demand

3) Low cost of production – better penetration

S: 1) Per capita consumption expected to increase – fashion

2) Increasing gifts culture – increase in demand

T: Will have to reinforce technology to international levels

Once India is a “fully free” economy.

 FIVE P’S OF MARKETING

Product
Satisfaction suffices. But delight dazzles the average company will

compete for customer by conforming to her expectation

consistently. But the winner will surpass them by constantly

exceeding her expectation, delivering to her door step additional

benefits which she would never have imagined possible. Hindustan

Unilever Ltd(HUL) offer such product. The wide variety products

offered by the company include:

The company’s popular product’s include:

• Bathing soaps:

Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona

• Laundry items:

Surf Excel, Rin and Wheel

• Skin care:

Fair & Lovely, Pond’s and Vaseline

• Hair care:

Sunsilk and Clinic

• Oral care:

Pepsodent and Close up

• Deodorants:

Axe and Rexona

• Colour cosmetics:

Lakme

• Ayurvedic:

Ayush

• Tea:

Brooke Bond and Lipton

• Coffee:

Bru

• Foods:

Kissan, Annapurna and Knorr

• Ice cream:
 Kwality Wall’s .

Pricing
Make no mistake. Second P of marketing is not another name for

blindly lowering prices and relying on this strategy alone to

increase sales dramatically. The strategy used by Hindustan

Unilever Ltd(HUL) is for matching the value that customer pays to

buy the product with the expectation they have about what the

production is worth to them.

Hindustan Unilever Ltd(HUL) has launched various products which

cater to all customer segments. So every customer segment has

different price expectation from the product. Therefore maximizing

the returns involves identifying right price level for each segment,

and then progressively moving through them.

Physical Distribution – “Place”
BRAND ISN’T THE ONLY ANY MORE. Marketers and finance

manager need a new term to evaluate their business:

Distribution Equity. It takes much more time and effort to build,

but once built, distribution equity is much together to erode.

The fundamental axiom of Indian consumer market is this:

You can set up a state-of –the-art manufacturing facility, hire the

hottest strategies on the block, swamp prime television with best

Ads, but the end of it all, you would be know of selling your

products. The cardinal task before the Indian market is managing is

to shoe-horn its product on retail shelves. Buyers are paying for

distribution equity not brand equity and market shares.

Why does the company need distribution equity more anything in

India? With technology and competitive pressure slash in it is

becoming increasing difficult for marketers to retain a unique

product differentiation for ling period. In a product and price parity

situation, the brand that sells more is the one that reaches the

highest number of customers.

India – The operations involve over 2,000 suppliers and associates.

HUL's distribution network, comprising about 4,000 redistribution

stockists, covering 6.3 million retail outlets reaching the entire

urban population, and about 250 million rural consumers.television

has already primed and population for consumption, and the

marketer who can get to the to the consumer ahead of competition

will give a hard – to – overtake lead. But getting their means

managing wildly different terrains-climate, language, value system,

life style, transport and communication network. And your brand

equity isn’t going to help when it comes to tackling these issues.

Own distribution network consist of clearing and forwarding (C&F)

agents & distribution stockiest. This network of distribution can

either contact wholesalers and which in turn retailers or the

distributors can contact to the retailers directly.

Once the stock product reaches retailers, the prospective

customers can have access to the product.

Hindustan Unilever Ltd(HUL) distributes the product in the manner

stated above.
Hindustan Unilever Ltd(HUL) distribution network has expanded.

Beside use of improved logistics, Hindustan Unilever Ltd(HUL) is

also attempting to improve the distribution quality. To address the

issue of product stability, it has installed visi colors at several

outlets. This helps in maintaining consumption in summer when

sales usually drops due to the fact that the heal effects product

quality and thereby off takes.

Looking at the low penetration of few products, a distribution

expansion would itself being incremental volume. The other reason

is arch rival Procter & Gamble Co. reaches more than a million

retailers.

This increase in distribution is going to be accompanied by

reduction in channel costs. Hindustan Unilever Ltd(HUL) marketing

costs, at 18% of total costs, is much higher than Procter & Gamble

Co. The company is looking to reduce this parity level. At

Hindustan Unilever Ltd(HUL), they believe that selling FMCG is it

like selling soft drinks.

Promotion
If an advertisement is to communicate effectively, the receiver
must at least half want it to, and be prepared too take step toward
the sender. Effective advertising is rarely hectoring or loudly
explicit…. It often both attracts and generates arm feelings. More
often than not, a successful campaign has a stronger element of
the unexpected a quality that good advertising shares with much
worthwhile literature.

To penetrate into the inner recesses of her memory,

communication must first ensure exposure, grab her attention
evoke her comprehension, grab her acceptance and then extract
retention competing with thousands of other units of
communication trying to do the same.

Finding showed that the adults felt too conscious to be seen

consuming a product actually meant for children. The strategic
response address the emotional appeal of the band to the child
within the adult. Naturally, that produced just the value vacuum
that Hindustan Unilever Ltd(HUL) was looking to fill. Thereafter it
was the job of the advertising to communicate customer the
wonderful feeling that he could experience by re-discoursing the
careful, unself conscious, pleasure – seeking child within himself –
a graft these feeling onto the Ad campaign like “hasso to khul k
hasso for close up”, “cream bathing bar for dove soap” and
daag ache hai for surf excel” have been sure shot winner with
the audience.

It has also launched Pureit, a home water purifier which supplies

drinking water without boiling/need of electricity , As well as
outdoor and radio ads, ad agency contract has created
communication for cinemas and even ATM machines for the brand.

All ICICI’ s ATM a message flashes on the screen as soon as

customer insert his ATM card. Something familiar is planned for
phone-book as well. In cinemas, Hindustan Unilever(Ltd)has a
message on-screen just before the lights are dimmed to give them
a chance to get their product There will also be after dinner
sampling in restaurants – to begin with, 30 catteries in Mumbai
have been selected.

Ad spend in 2000 was about 14% of sales and the management

said that plans to maintain as spend at this level in the current
year also.

Ad since any discussion today would be incomplete without

mention ‘e’ word, the management plans to tap this new channel
of marketing. Beside the company website (i.e.
www.unilever.com), that the company has launched, it had also
entered into various marketing relationship with other portals,
specially targeted during festivals and events such as Valentines
day, etc….

It’s a combination of spiffing up its key brand, researching and

improving the newer products that haven’t taken off, supported
with high ad – spends that Hindustan Unilever(Ltd) hopes will see it
emerges stronger after the current slowdown, as well as expand
the market.

Positioning
In the 1970s consumers were ready to pay “more for more”, and

luxury goods flourished. In the 1980s, consumers began to demand

“more for same”, and the discounting era grew strong. Today’s

consumer demanding “more for less”, and the winner will be that

super value marketers…. Some of today’s most successful

companies recognize those customers are more educated and able

to recognize true customer value…

Positioning is simply concentrating on an idea – or – even a word

defines that company in the mind of the consumer. It is more

efficient to market one successful concept to one large group of

people than 50 product or service ideas to 50 separate group…

repositioning is a must when customer attitude have changed and

product have strayed away from the consumer’s long standing

perception of them…

Hindustan Unilever(Ltd) is an anchor in sea of consumer products.

As a variety of competitive claims assails her senses, today

customer uses complicated decision making process to assess the

alternative before making a purchase. Since Hindustan

Unilever(Ltd) is more clearly associated with a particular set of

attributes in terms of benefits and prices, the quicker becomes her

search process.

Positioning of individual product:

1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a

hundred-year history, as www.unilever.com informs. “Lifebuoy

has become more than just a red bar of soap – today the

brand provides hygiene and health solutions for families

2) Fair & Lovely, a hot-selling “fairness” cream, which promises a

lighter skin tone for many of India’s complexion-conscious

consumers

.
 HINDUSTAN UNILEVER’S MARKET
SEGMENTATION
Market place for any product is comprised of many different

segments of consumers, each with different needs and wants.

Markets segmentation can be defined in a number of ways such as:

 Demographic variables (e.g. Consumers are groups, gender,

material states income etc…)

 The lifestyle of consumers (i.e. their interests and activities)

the benefits which consumers look for in a product or on the

occasions when the product might be consumed.

 Hindustan Unilever(Ltd) takes into account all these factors

when producing a range of products. It targets different

segments within the market, such as the:

 Break segment – products which are normally consume as a

snatched break and often with tea and coffee.

 Impulse segment – these products are often purchase on

impulse, used these and then. They include product such as

close up.

 Take home segment – this describes product that are

normally purchased in supermarkets, taken home consumed

at a later stage.
 The Real Taste of Rejuvenation

After having fought a bitter price battle for market share with its

rivals, Hindustan Unilever Ltd (HUL), Indian subsidiary of the Anglo-

Dutch consumer goods company Unilever Plc, is now working on a

new growth strategy for its laundry business.

“Price cut or hike is not a long-term growth strategy. Pricing, in

fact, is now passe,” insists Sudhanshu Vats, category head, home

care.
“Our strategy for growth, now is focused on product innovation,

new consumer and retail trends and aggressive marketing and

promotions,” he said.

This comes even as Unilever is scouting for a potential buyer for its

laundry business in the US.

HUL says it is quite upbeat about the segment and says the

laundry segment is one of its “key growth areas.”

“We have done key innovations across the product portfolio and it

is working for us,” says Vats. “We successfully migrated from Rin

Supreme to Surf Excel and Wheel Smart Srimati—which was rolled

out in 2006—is also on the right track.”

HUL’s market share in the laundry segment grew to around 37.8%

in the quarter ended June from 35.5% in the same period last year.

According to ACNielsen, the laundry industry in India was worth

Rs7,908 crore in 2006 and rose 8.4% over 2005. HUL doesn’t

report its laundry revenues separately but puts them under the

soaps and detergent category.

In 2006, HUL’s soaps and detergents segment contributed around

Rs5,596 crore to the company’s total sales of Rs12,103 crore.

“Laundry has been an attractive segment in the past and is likely

to keep growing in the near future. The recent price war between

companies led to erosion in their profitability but now, the industry

is stabilizing.

COMPETITIVE STRATEGY
As Competition Heats Up, India’s Top Consumer-Products Company

Woos Affluent Shoppers With Global Brands Like Dove, While

Cooking Up Its Foods Biz

The middle-aged Briton strolling the aisles and checking out the

products doesn’t attract much notice from other shoppers in

Mumbai’s Hypercity, the India hypermarket chain. That’s how

Douglas Baillie likes it. Baillie, the managing director of Hindustan

Unilever, India’s premier consumer-products company, wants to

see how his products are stocked, what consumers are buying, and

how shoppers are reacting to competitive brands. It’s primary

market research at its most elemental, and it’s best done

incognito.

Hindustan Unilever has traditionally relied on small traders and

mom-and-pop corner stores to retail its products. But India’s recent

retail boom has created large stores and malls, so the company

wants to make sure it’s in with the new marketing crowd. Hence

Baillie’s Hypercity visits, and the calls he makes on the

headquarters of the big retail chains.

This is quite a change for Hindustan Unilever, whose executives

used to have emissaries make obeisance at Lever house in

downtown Mumbai. “I can’t imagine any head from Lever House

ever visiting other company offices like this,” says an amazed

Damodar Mall, chief executive of innovation and incubation at

Pantaloon Retail, India’s largest retailer and a former manager at

Hindustan Unilever.
Facing Competition From P&G And Others
The reason for this new found egalitarianism is that the $3 billion

Hindustan Unilever is facing serious competition. The company,

which is practically synonymous with India, makes everything from

detergents, soaps, and shampoos to soups, sauces and tea, and

dominates most of those categories. Yet early this year, Finnish

handset maker Nokia (NOK) dislodged it as the multinational with

the highest revenues in India, after ringing up India-based sales of

$3.5 billion.

Now Hindustan Unilever is under siege from aggressive Indian and

foreign competitors such as Procter & Gamble (PG), Nivea, and

L’Oréal. In the last year, ACNielsen data shows, Hindustan

Unilever’s lead in hand soaps, including the popular Lux, is down

from 55.2% to 54%. Favorite detergent brands like Surf Excel and

Rin are barely hanging onto their 37% share. Hindustan Lever tea

brands like Brooke Bond and Lipton have dipped from a combined

market share of 29.2% to 24.3%.

All this has taken a toll on Hindustan Unilever’s operating margins,

down from 21% a few years ago to just 11.84% now. That’s why

the company is wooing consumers in big retail stores. These newly

affluent shoppers present the best hope for the company’s future

in India. According to retail consultant KSA Technopak, organized

retail, currently just 3.5% of India’s total $336 billion retail

market, will grow to 28% by 2017.

Hindustan Unilever’s managers hope their revenues from big retail

will increase from 5% today to over 25% in 2012. “It is a big game
for us,” says D. Sundaram, Hindustan Unilever’s finance director.

Hindustan Unilever’s strategy is to market its premium products

through the hundreds of megastores springing up across India.

That dovetails with parent company Unilever’s new global

realignment of products.Parent Unilever will develop the brands

and streamline product offerings across the world, while its

subsidiaries will sell the products.

This means that all of Unilever’s brands will be available across

global markets, fitting in quite nicely with India’s turn towards

more international products being sold in supermarkets.

Yet this is still a dramatic change for Hindustan Unilever which, not

long ago, was the most successful and profitable company in the

Unilever group, the crown jewel whose managers had free rein to

develop and build brands suitable for the local market. The

takeover of Hindustan Lever by Unilever became evident in March,

2006, when Baillie, a Zimbabwe-born British national, became the

first foreigner in four decades to head the Indiancompany.

From Local Player To Multinational

Overnight the change sent shock waves through India. For many

decades most Indians thought Hindustan Lever was a local

company, not a multinational, and the cream of India’s

management graduates made their careers there. Then in

February, 2007, the company, then known as Hindustan Lever, was

rechristened Hindustan Unilever to reflect its parentage.

Baillie first had to sort out some past problems. For instance, in

2002 the company adopted Unilever’s global strategy of focusing

on just 30 power brands instead of the total basket of 110 more

local brands. While the strategy aimed to conserve management

energy, it also left the field wide open for competitors to attack

Hindustan Unilever in the niche soap and detergent markets where

its smaller brands held sway.

And there was some stiff competition from rival Procter & Gamble;

a 2004 price war with P&G in the detergent business forced

Hindustan Unilever to slash prices on its premium brand Surf Excel.

The effect: The company’s sales and operating profits stagnated at

$2.5 billion for five years while operating profit plunged 37%, to

$274 million in 2004. Last year operating profits reached $357

million, thanks to price increases. But the rich margins of the past

have not returned.

 Tougher To Hold On To Market Share
Baillie says he intends to get the company back “into the

competitive growth zone and do this in a manner that we can

consistently deliver.” He also wants to expand the foods business

in conjunction with the parent, where foods bring in half the

revenues globally. In India, the company’s home and personal care

businesses account for 80% of revenues and 85% of profits at

Hindustan Unilever, while the company’s track record in foods has

been dismal. Indeed, it has phased out more food products—wheat

flour, confectionery, frozen bread—than it has launched.

Hindustan Unilever executives are realistic about the new era in

which it now operates. Nitin Paranjpe, executive director in charge

of the home and personal care business, admits that it’s now

“tougher to hold on to market share. If India is a great story, we

aren’t the only ones seeing it.” Rivals like P&G and Nivea have also

copied Hindustan Unilever’s best innovation: the small shampoo

sachets it pioneered in the 1980s, which sold for less than 2 cents

each and which expanded the market for Hindustan Unilever

products among India’s rural masses. Currently, 80% of Indian

shampoo sales come from sachets. But today even L’Oreal has

sachets of its Fructis shampoo.

In June, the Tata Group’s beverage company Tata Tea overtook

Hindustan Unilever as India’s largest selling tea brand. According

to ACNielsen, Tata Tea’s market share increased from 16.7% in

March, 2006, to 19.9% in July, 2007, while Hindustan Unilever

slipped from 26.1% to 19.5%. Tata Tea is exultant. Managing

Director Percy Siganporia says the gain is “a dream comes true for

us.”

FUTURE COMPETITIVE STRATEGY

2010 Expectations
P&G, the world's largest consumer-goods maker, will continue to

gain share in the next five years in India, according to Ali Dibadj,

an analyst at Sanford C. Bernstein in New York, who rates the stock

``outperform.'' Hindustan Unilever Ltd., 52 percent owned by the

London- and Rotterdam-based parent, lost ground in shampoo,

bath soap, toothpaste and tea in the quarter ended Sept. 30,

compared with the year earlier, according to the company. Its

share of the shampoo market declined by more than a percentage

point to 47.7 percent, the company said.

ITC, the largest Indian cigarette maker and partly owned by British

American Tobacco Plc, is also making inroads. It started selling

more brands including Fiama Di Wills shampoo and Superia soap

last year as the government raised tobacco taxes.

`Profitable' Cigarettes

The tobacco maker ``has a very profitable cigarettes business

which will help it to invest and expand its personal- care portfolio,''

said Anand Shah, an analyst at Angel Broking in Mumbai, who has

a ``neutral'' rating on the stock. ``It has the ability to take losses in

this segment as long as it grows its sales. This strategy will still

satisfy investors.''

Rising prices of raw materials have made it more difficult for

consumer-goods makers to pass on higher costs. The price of palm

oil, used to make soaps and foods, has surged 70 percent in the

past year.
``Given the competition, profitability will continue to be under

pressure,'' said Macquarie Securities Ltd. analyst Unmesh Sharma,

who has an ``underperform'' rating on Hindustan Unilever. He

expects the stock to drop to 180 rupees ($4.57) in the next year

from 190.9 rupees. The company has a market value of about

$11.8 billion.

India is Unilever's biggest market in Asia, generating about 6

percent of annual sales. It has sold soap in the country since 1888

and controls about half of the sales of products such as skin

creams, bathing soaps and shampoo.

HUL-UNIQUELY POSITIONED TO
CREATE VALUE

 Our strategy

 Competitive strengths
  Innovation and R&D capabilities to straddle the

pyramid

 Versatile distribution network

 Strong corporate responsibility and governance

 Strong local and talent base

Strategy

 Grow ahead of the market by leading market development

activities.

 Leverage positive impact of growing Indian economy on

consumer spending.

 Grow a profitable foods and top end business.

 Grow the bottom line ahead of the top line.

  Strong commitment to sustainable development.

Competitive Strengths

Corporate Social Responsibility-Aiding In The

Development Of The Country
Shakti
Three shakti initiatives

• Shakti entrepreneur; currently~44000 women cover

1,25000 villages.

• Shakti vani: one-to-many communication for category

growth

• ishakti: customized interaction with remote

consumers.

Impact of community

• business and social impact can go together.

• partnerships with diverse stakeholders.

HINDUSTAN UNILEVER LIMITED -

COMPARATIVE BUSINESS ANALYSIS
Hindustan Unilever Limited Formerly known as Hindustan Lever

Limited. The Group's principal activities are to manufacture and

market consumer products. The Group operates through seven

segments: Soaps and Detergents, Personal Products, Exports,

Beverages, Foods, Ice Creams and Other. The products include

home and personal care products, foods and beverages, industrial

and agricultural products. Home and personal care products

consists of personal and fabric wash, household, oral care, skin and

hair care, deodorants, perfumery, colour cosmetics and baby care.

Foods and beverages includes tea, coffee, cooking fats and oils,

bakery fats, ice creams, tomato products, fruit and vegetable

products, rice, salt, atta and rawa, marine products and

mushrooms. Industrial and agricultural products includes specialty

chemicals, bulk chemicals, fertilisers, animal feeds, seeds, plant

growth nutrients, processed-tri-glycerides and agri commodities,

yeast, leather, footwear and carpets, thermometers and

plantations.

This analysis compares Hindustan Unilever Limited with three other

companies in closely related industry sectors.

The company focuses on efficient delivery to consumers with an

improved supply chain, brand building initiatives and innovation,

which has helped the company to sustain its leadership position in

the overall FMCG category in India.

Its brands are spread across 20 consumer product categories.

Hindustan Unilever markets consumer goods throughout India. The

company faces competition from international, local and regional

players.

RURAL- THE BIG INDIAN ROMANCE

 Rural population larger than europe(800 million)

 Low growth in agriculture;however rural income are growing

faster with 70% population here,income growth is crucial.

 Structural changes in the economy which are affecting this

are:

 Disintermediation in the agricultural market price

discovery mechanism has benefited farmers.

  Government grants and subsidies.employment

grants-Rs 40000cr

Did Hindustan Unilever Get Its Rural Pitch

Right?
A new book from Wharton School Publishing is critical of Hindustan

Unilever’s advertising strategy in India.

“HUL missed an opportunity for increased marketing productivity

when they repositioned, retargeted, and relaunched Lifebuoy,”

write Leonard M. Lodish, Howard L. Morgan and Shellye

Archambeau, the authors of Marketing that Works. Though the

company was ‘extremely innovative’ the way it handled the rural

communications plan was very traditional, they add.

The company basically worked with “one agency, Ogilvy and

Mather (O&M), and screened some options to roll out one option

that everyone was happy with,” reads an observation in a chapter

titled ‘entrepreneurial advertising that works’.

A better strategy, according to the authors, would have been to

develop “a number of different communications executions using

different creative sources and then testing them as part of the

early rollout.”

Advertising strategy came for mention when the company reported

the second quarter results, a few days ago. Mr D. Sundaram,

Director (Finance & IT), HUL, said: “We have been phasing our

advertising spends depending on the launches and relaunches of

brands.” The advertising spends have not been linear for the

company, he added. The company’s advertising and promotional

spends during the quarter fell to Rs 336 crore, from the earlier Rs

345 crore.

Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a

hundred-year history. “Lifebuoy has become more than just a red

bar of soap – today the brand provides hygiene and health

solutions for families,” says the site, in a paragraph on innovation.

“Differentiating soap products on the platform of health takes

advantage of an opening in the competitive landscape for soap,”

reads a quote in the book from C.K. Prahalad’s The Fortune at the

Bottom of the Pyramid .

HUL, through its innovative communication campaigns, has been

able to link the use of soap to a promise of health as a means of

creating behavioural change, and thus has increased sales of its

low-cost, mass-market soap, Prahalad notes.

The O&M strategy, as explained by Mr Lodish et al, targeted

“10,000 villages in nine states where HUL stood to gain the most

market share… They spent a lot of effort in designing low cost

ways of communicating with their rural target.”

The authors are of the view that government workers who have

been interacting with villagers might have come up with some

excellent ideas; “or the villagers themselves might also be able to

generate very effective communications vehicles.”

So, why didn’t HUL try alternative campaigns when rolling out its

initiative? “Probably the biggest reason is that they always did

their communications the same way – even for innovative

programs,” wonder the authors. “As a big company, many times it

is difficult to change the procedures without creating significant

political problems.”

The HUL example, which is one of the many discussed in the book,

concludes by stating that globally very progressive and innovative

firms can also benefit from being “more entrepreneurial and less

traditional in how they manage their advertising and

communication.”

JOINT VENTURE
Hindustan Unilever Sets Up Joint Venture With
Smollan Holdings
Hindustan Unilever Limited (HUL) has decided to set up a Joint

Venture (JV) with Smollan Holdings of South Africa and the JV will

be operational from January 1, 2008. The strategic tie-up aims to

build long term capabilities and bring ‘in-store’ execution focus in

servicing the Company’s Modern Trade customers.

The new company has been named as Hindustan Unilever Field

Services Private Limited (HUFS) and will work exclusively on behalf

of HUL in Modern Trade channel only. The operations will begin

with the existing Modern Trade in-store execution team of HUL

moving into HUFS.

Smollan Holdings is one of the leading ‘in-store execution and field

services’ companies internationally. It has leading edge capabilities

in servicing Modern Trade focused on shelf filling, logistics for

merchandising materials and in store execution.

“Modern Trade in India is growing and evolving very rapidly and

our strategy for winning in this growing retail market is to win at

point-of-purchase with our shoppers & by delivering best-in-class

service to our Modern Trade customers. This JV will bring in world

class execution excellence in the market and build the right

capabilities to deliver the company’s marketing strategy in Modern

Trade”.

Other Acquisition
Hindustan Unilever has acquired several Indian FMCG companies

so far. This includes:

 • Tata Oil Mills Company

• Brooke Bond

• Lipton India

• Modern Foods

It acquired Kissan brand from UB group; Dollops ice cream brand

from Cadbury India; Lakme cosmetics brands from Tata. It has also

launched Pureit, a home water purifier which supplies drinking

water without boiling/need of electricity.

Hindustan Unilever Network is the direct selling channel of the

company. It has about 350,000 consultants, all independent

entrepreneurs, trained and guided by HLN's expert managers and

trainers.
 NEW INITIATIVE
Bringing High-End Dove To India

Baillie is fighting back. Over the past six months, Hindustan

Unilever launched a high-end range of Pond’s skin care and Dove

hair care products from Unilever’s international portfolio. These

premium brands retail not in neighborhood small stores but in

supermarkets and hypermarkets, where Indian customers love to

touch and feel products.

Hindustan Unilever is also milking one of its top brands—Fair &

Lovely, a hot-selling “fairness” cream, which promises a lighter

skin, tone for many of India’s complexion-conscious consumers.

The advertising campaign, which suggests that regular use of the

cream helps women gain confidence and makes them eligible for

marriage, has made the brand a winner. That has spawned a host

of competitive fairness creams, soaps, and sunblock lotions. But

Hindustan Unilever’s brand is still tops.

Baillie is also getting aggressive on foods, focusing on the Knorr

brand of soups and curry mixes—ideal for the Indian market.

Analysts believe the company’s current strategy of concentrating

on premium products and marketing them in the large retail stores

is a winning one. Sumeet Budhraja, consumer analyst at Mumbai

brokerage First Global Securities, says that Hindustan Unilever

“could have addressed a lot more categories, but they are more

focused and regaining their aggressiveness.” He points to the

demand for safe drinking water in India, which Hindustan Unilever

exploited with the launch of water purifier Pureit in 2005, at one-

third the price of established Indian brands such as Aqua guard.

These efforts have delivered some promising results, and Baillie is

pleased with the modest turnaround. In the quarter ended June,

2007, the company’s sales grew 13%, with net profit up 29.6%.

Reason enough to keep patrolling those store aisles.

SERVICE TO SOCIETY
HUL believes that an organisation's worth is also in the service it

renders to the community. HUL is focusing on health & hygiene

education, women empowerment, and water management. It is

also involved in education and rehabilitation of special or

underprivileged children, care for the destitute and HIV-positive,

and rural development. HUL has also responded in case of national

calamities / adversities and contributes through various welfare

measures, most recent being the village built by HUL in earthquake

affected Gujarat, and relief & rehabilitation after the Tsunami

caused devastation in South India.

In 2001, the company embarked on an ambitious programme,

Shakti. Through Shakti, HUL is creating micro-enterprise

opportunities for rural women, thereby improving their livelihood

and the standard of living in rural communities. Shakti also

includes health and hygiene education through the Shakti Vani

Programme, and creating access to relevant information through

the iShakti community portal. The program now covers 15 states in

India and has over 31,000 women entrepreneurs in its fold,

reaching out to 100,000 villages and directly reaching to 150

million rural consumers. By the end of 2010, Shakti aims to have

100,000 Shakti entrepreneurs covering 500,000 villages, touching

the lives of over 600 million people.

HUL is also running a rural health programme – Lifebuoy Swasthya

Chetana. The programme endeavours to induce adoption of

hygienic practices among rural Indians and aims to bring down the

incidence of diarrhoea. It has already touched 70 million people in

approximately 15000 villages of 8 states. The vision is to make a

billion Indians feel safe and secure.

If Hindustan Unilever straddles the Indian corporate world, it is

because of being single-minded in identifying itself with Indian

aspirations and needs in every walk of life.

PERFORMANCE REVIEW

Leadership Across Diverse Fmcg Category

Record Performance
Financial Overview -2007
*FIGURES BASED ON FY 2007 AUDITED RESULTS

OBJECTIVE OF THE STUDY

 To identify the marketing strategies and policies of

Hindustan Unilever Limited

 To analyse the influence of rival company’s strategies on

the performance of Hindustan Unilever Limited

 To analyse the various strategies adopted by the

company to gain competitive advantage

 RESEARCH METHODOLOGY
Achieving accuracy in any research requires in depth study

regarding the subject. As the prime objective of the project is to

compare Hindustan Unilever Ltd’s(HUL) with the existing

competitors in the market and the impact of Procter & Gamble

(PG), Nivea, and L’Oréal on HLL, the research methodology

adopted is basically based on primary data via which the most

recent and accurate piece of first hand information could be

collected.

Primary data was collected by the

Questionnaire &

Personal Interview Method

Sources of secondary data :

Used to obtain information on, HUL and its competitor history,

current issues, policies, procedures etc, wherever required.

# Internet-www.unilever.com, www.Google.com

# Magazines-Business Today

# Newspapers-The Economic Times

Procedure of research methodology

# Target geographic area was Delhi.

# To these geographical area questionnaire was given, the

questionnaire was a combination of both open ended and closed

ended questions.

# The date during which questionnaires were filled was between

three week.

# Some dealers were also interviewed to know their prospective.

Interviews with the honour of retailer of HUL were also conducted.

# Finally the collected data and information was analysed and

compiled to arrive at the conclusion and recommendations given.

 LIMITATIONS
While undertaking my study I was encountered with some

limitations:

 Limited time was provided to complete the study.

 Cost involved in collecting the data was high.

 Target geographic area was limited to Delhi.

 To fix an appointment with the dealers was also very

difficult task and even after that many time people

was not turn up for the appointment.

 ANALYSIS AND
INTERPRETATION
 3rd consecutive yearof accelerated growth in FMCG
portfilio.Growth broad based and across all categories.

 FMCG market expected to maintain current growth levels.

 Successfully implement the food strategy.

 Build momentum to the water business.

 Build on competitive capabilities across the business system.

 Manage cost inflation effectively to improve margin through

pricing,cost saving and better mix.

 Strong commitment to governance and CSR.

 CONCLUSION

This company project has demonstrated “HINDUSTAN UNILEVER’S

MARKETING STRATEGIES AND POLICIES” that has proved to be

extensive through, and of great benefit to the company in

furthering its competitive advantage.

In this project it possible to see the success of Hindustan Unilever’s

in it’s indorse its strong potential to continue to do well.

 BIBLIOGRAPHY
• A L Ries (1996), “Focus” Harper Collins Publishers Ltd.

• David A. Aaker (1991), “Managing Brand Equity”, The Free

Press.

• David A. Aaker (1996) “Building Strong Brands”, The Free

Press.

• Philip Kotler (Eighth Edition) “Marketing Management”,

Prentice Hall of India Ltd.

• The Economic Times – “Brand Equity”

• Market survey and questionnaires

• www.unilever.com
 QUESTIONNAIRE

1. Do you use FMCG products?

 Yes  No

2. Which brand of FMCG products do you use?

 Hindustan Unilever

 P&G

 Nivea

 Others

3. Where do you buy FMCG products from?

 Super stores

 Retail Stores

 Others

4. Are you aware of any campaign of the above brands?

  Yes  No

5. Which Hindustan Unilever’s product do you usually prefer or

use?
 Bathing soaps  Skin care

 Foods  Deodorants

 others

6. Do you think Hindustan Unilever’s product is easily available in

market ?
 Yes  No

7. Describe Hindustan Unilever in one word?

8. Your comments on Hindustan Unilever’s product?

_______________________________________________
 CONTENTS

S NO. PARTICULARS PAGE

NO.

1 Introduction

2 History of Hindustan Unilever

Limited

3 Oganisational Structure

4 Present status

5 HUL’s new growth strategy

6 Product profile

7 SWOT analysis

8 PEST analysis

9 Future competitive strategy

10 HUL-comparitive business analysis

11 Joint Ventures

12 New initiatives

13 Research Methodology

14 Analysis

15 Conclusion

16 Bibliography

17 Questionnaire